In a deal that could speed up its transition to a lower paid workforce under a deal agreed with the union last year, General Motors on Tuesday said it and the United Auto Workers (UAW) union have reached an agreement on a buy-out programme that will be offered to all of the automaker’s 74,000 UAW-represented employees.
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The programme offers a variety of pension and buyout incentives. GM is offering retirement pension incentives of $45,000 for production employees or $62,500 for skilled trades. Eligible employees can select from a variety of ways to receive their incentive: one time, lump-sum cash payment; direct rollover into their GM 401(k) or into an individual retirement account (IRA) [both US pension plans]; a monthly annuity; and a combination of partial lump-sum payment and direct rollover into their GM 401(k) an IRA.
The other options are similar to those offered to employees in 2006 and include: mutually satisfactory retirement (MSR) for employees who are at least 50 years old with 10 or more years of service. This option provides a pension payment with full benefits.
Pre-retirement programme in which employees with 26, 27, 28 or 29 years of service can grow into a full “30 and out” retirement. Until they reach 30 years of credited service, participating employees would receive a fixed monthly payment with full benefits.
Cash buyout for employees who agree to voluntarily quit and sever all ties with GM.
A $140,000 buyout incentive is offered to employees with 10 or more years of credited service or seniority; $70,000 to employees with less than 10 years of credited service or seniority.
In December 2007, GM and the UAW reached an agreement on what the company was calling the first phase of a comprehensive special attrition programme. Details of this were rolled out to employees at select locations last month. Those employees are now eligible for the enhanced provisions of this new agreement.
“We’ve worked with our UAW partners to ensure our employees have a variety of attractive options to consider,” said GM chairman and CEO Rick Wagoner in a statement. “The special attrition programme is an important initiative that will help us transform the workforce.”
Announcing full-year and Q4 2007 results on Tuesday, GM said it expects to derive additional structural cost savings of $4bn to $5bn by 2010 in the US as it fully implements the 2007 GM-UAW contract, including the independent healthcare trust established for the union to run.
